Most of the deal work consists of reading through documents, modeling (mostly merger models, valuation, and also looking at deal structures such as earnouts), and doing due diligence.

I’ve also been to China several times to meet with companies there and learn about our market abroad – even though the company hasn’t gone public yet, they’ve been looking for ways to expand more quickly.

As part of that I’ve also had to analyze industries outside of our core business and create presentations for the senior management team here.

They’re concerned with growth because it’s difficult to have a successful IPO without at least double-digit growth, and if you look at the biggest and most successful tech companies out there right now, they’re often closer to triple-digit growth.

M&I Note: An earnout is a deal structure where some of the payment is contingent on the performance of the acquired company.

So let’s say you’re paying $100MM for another company – if you include a $10MM earnout, you would pay $90MM in cash upfront and then the remaining $10MM later on if the company hits certain performance goals (20% revenue growth, $5MM EBITDA, etc.).

Q: Right. So it sounds like you don’t do much sourcing?

A: Not really – unlike, say, smaller PE firms, they don’t make me do any cold-calling and they don’t track how many companies I’ve contacted.

We’re well-known in the space, so if I have to contact someone I’ll just email them and usually get a response quickly.

I contacted other companies for 1-2 months in the beginning, but after that I’ve only been working on deals that were brought to us.

Since our market is well-established, it’s tough to come up with creative new ideas that the executives haven’t already thought of.

Q: So how much time do you spend on deal work vs. competitive analysis vs. researching new markets? You mentioned that you spend most of your time on M&A deals and partnerships, but what’s the split?

A: I would say:

M&A Deals and Partnerships: 50%

Researching Industries and Markets: 25%

Competitive Analysis: 25%

If you’re wondering about travel, I’ve been to China 4 times so far in 2 years and I’ve traveled domestically about 2-3 times – not a huge amount, but once every 2 months or so I’ll go somewhere.

Q: You lumped together partnerships and M&A deals – but I’m assuming that they’re at least somewhat different since you’re not acquiring 100% of a company in a partnership.

How does the work actually differ? Most readers are familiar with the M&A process but not partnerships.

A: The main difference is that there’s less due diligence and more deal analysis with partnerships.

When you acquire another company, you really need to know what you’re getting into – if the books don’t look right or they have some kind of random legal problem, you could end up with the next Enron or WorldCom.

So you have to be incredibly thorough and bring in outside consultants, lawyers, and other advisors and spend millions to verify everything.

With partnerships, though, it’s more like you’re dating someone rather than getting married, so you don’t need to scrutinize every single point in their business.

But the deals themselves can get very complicated, far more so than the average M&A deal.

While some M&A deals can have complex structures – a cross-border deal where you acquire a subsidiary of another company or a reverse merger, for example – the average deal is pretty simple: you pay a mix of cash, stock, or debt for 100% of the other company.

But the average partnership has significantly more complex terms: for example, you might have an upfront payment that’s based on referrals or cross-selling one of your products, then you might also get paid a certain amount for back-end or subscription sales, and then you might get some type of bonus incentive for certain performance goals.

Since there’s more variety to the deal structures, you spend more time building models in Excel and figuring out the key assumptions and drivers.

Ladders, Hours, Pay, and Culture

Q: So if you like modeling, it sounds like working on partnerships might be right up your alley.

What about the hierarchy? Is it like the investment banking hierarchy where you have a rigid structure and narrowly defined roles? How easily can you advance, and is CFO or Group Head the ultimate goal?

A: The exact “ladder” depends on the size of your company – at mine, it goes something like this:

Associate (also called Manager or Analyst, it varies depending on the firm)

Manager

Director

Senior Director

Vice President

C-Level positions

So the titles are somewhat different from banking – one key difference is that the “Vice President” title means a lot more here as it’s one removed from the top, whereas in banking it’s more of a mid-level role and “Director” is usually above VP in the hierarchy.

At F50 and F500 companies, there are more levels than this – for example, you might see multiple “Manager” levels and titles like “Senior Manager” or “General Manager” in addition to just “Manager.”

The main difference with promotions, compared to banking, is that the timetable is more random and you’re not following as strict of an “up or out” policy.

Most likely you could become Head of Corporate Development or VP of Corporate Development, but you wouldn’t go beyond that unless you could show a track record of managing large groups of people and doing more than just deal-making.

Q: Wait a minute – if that’s true, then how do you become CEO? It sounds like you can’t advance to that position organically, so do you have to start a company yourself first?

A: I wouldn’t say you “can’t” advance naturally, but it’s hard to reach a C-level executive position from corporate development specifically.

Our CEO was one of the first investors in the company and was on our Board as an investor long before he took over the CEO role. Before that he had also been the CEO of another company, similar to Tony Hsieh at Zappos.

In the tech industry, your best option for becoming CEO is to start the company yourself, do well, exit, and then use your status to leverage your way into other CEO positions.

That may not be as applicable in industries like manufacturing where you don’t see conventional “startups” – at a company like GE you could advance from within the rank-and-file, but it might take decades to reach the CEO level (see: Jack Welch).

Q: So it sounds like corporate development, or joining a normal company in general, is not the best path to riches.

What about the hours? Do you have to pull all-nighters and work weekends like in banking?

A: Overall it’s a 9-6 job, but occasionally I get rough weeks depending on whether or not there are live deals. So I’d say the average is about 40-50 hours per week, which may climb to 60-70 with deals in progress.

I’ve stayed past midnight before when we’ve been working on live M&A deals and have been under pressure to get them announced and closed quickly, but I haven’t yet pulled a true all-nighter.

If we’re not busy they would probably even let me work from home occasionally – as I mentioned before, it’s a very small team so it’s not as if I’d miss dozens of meetings during the day.

So far, no weekend work except for when we come up on a tight deadline with a live deal.

Q: So you actually get to have a life outside work, how about that – are you sure you work in finance?

The hours sound much better, but doesn’t that mean the pay is also much worse? If you’re not working that much, you can’t possibly earn that much, right?

A: The base salary range for corporate development here is $90-$110K USD. We also get a bonus, but it’s much smaller than in banking – if you’re at a bigger company, you might be looking at $150K all-in compensation as a first-year associate in the corporate development team.

That’s still a great number, but it is less than what you’d earn as an associate in banking, PE, or at a hedge fund.

It’s tough to say how the pay changes as you move up the ladder, because it depends on your industry, the size of the company, and how the group works.

In general, you should expect more modest pay increases compared to banking – a 2nd year associate might earn $120K in base salary and a slightly higher bonus.

People above my level might make around $200-$300K all-in, and by the time you get to VP and C-level positions you get into the $500K-$1MM range, with some C-level executives earning in the low millions all-in.

You will see lower figures at earlier stage companies, with a greater percentage coming in the form of stock grants, options, and Restricted Stock Units (RSUs).

Q: I’m glad you brought that up, because I was just about to ask you about that one – can you tell us about stock-based compensation?

In banking this is something you never have to think about at the junior levels because your pay is limited to base salary + cash bonus, but at normal companies you may get paid with stock options as well.

How much are they worth, and what are the nuances you need to be aware of?

A: I’ve earned around $30-40K worth of stock options over my first 2 years here – that figure is based on my company’s valuation in its most recent round of funding.

That sounds like a nice bonus in theory, but at most pre-IPO startups these options are worthless until you can actually exercise them.

That is starting to change with people like Yuri Milner at Digital Sky Technologies, who invest huge amounts in late-stage companies and give founders and employees liquidity prior to the IPO, but if you’re at a lesser-known company (not Facebook/Zynga/Twitter/Groupon) don’t count on that.

Secondary markets have been growing lately as well, but again, unless you’re at a hyped company there may not be much of a market for stock or options that you hold.

Besides the points above, you also need to be aware of the type of compensation you’re getting, the company’s valuation, and the vesting period for any options you get.

Q: Right, and that information might be very difficult to find depending on the company. I know you could probably write a book on those topics, but can you tell us the key points?

A: Sure. First, there are a couple different types of stock-based compensation:

Stock Grants: You receive x number of shares in the company, which vest over y years.

Stock Options: You receive the right to purchase x number of shares in the company for y price, and those rights vest over z years.

Stock Awards: You receive x dollar amount of compensation, and the company then uses that dollar figure to purchase y number of shares on a certain date, and those shares then vest over z years.

Restricted Stock Units (RSUs): These are similar to normal stock grants, but there are restrictions on when you can transfer or sell the stock and the tax consequences may be different.

The biggest issue here is getting information from your company in the first place – they’re not going to share the cap table with you, so at best you might be able to get the most recent valuation from them or the total # of options outstanding and the average exercise price.

M&I Note: The “cap table” or “capitalization table” is a detailed breakout of shares, options, and RSUs owned by each employee and investor in the company and the accompanying grant date, vesting period, and exercise price information.

If you had the cap table, you could calculate how much everyone would earn when the company is sold for a certain price.

As you can imagine, this is highly sensitive and usually only the CFO and CEO have access to it.

There’s still pressure to perform and you can’t just slack off and expect to get ahead – but since you’re not at the mercy of psychotic clients all the time, you don’t have as much stress.

You still need solid attention detail, but the numbers matter more than the formatting and it’s not the end of the world if you forgot to change the font size on page 51 of your presentation.

Most people here are older than me, so that creates some differences compared to what you see in banking. And since my department is small, I’ve mostly hung out with others sitting around me but who don’t work directly in my group (we have bullpen seating).

Overall you don’t get to know your co-workers as well as you do in banking, but you do get more social interaction than if you were at a small PE firm where it’s just you and the Partners.

China, Job Satisfaction, and Exit Opps

Q: You mentioned before how you had the chance to travel to China and meet with companies there – how did that come up? Did you jump, or were you pushed?

A: I never asked about it – they brought it to me after I joined. The CEO was very interested in emerging markets and wanted us to look into expanding there.

I had no expertise in China and didn’t have the language skills to conduct business there – but at most companies, someone knew English or we had a translator.

It was pretty much just the VP of Corporate Development and I finding interesting companies in the region, emailing them to set up meetings, and then traveling there to meet them.

We didn’t come in with a particular purpose or say we were looking to acquire or partner with them – it was more exploratory and we spent most of our time trading information, building the relationship, and seeing if we could help each other out in any way.

What’s the best part of your job? How do you like it compared to banking?

A: Overall I like it, and I’ve enjoyed the day-to-day stuff more than what I did in IB. If you want to move into an operational role after doing banking, corporate development is the way to go since you work with senior management across different departments.

It’s a much broader role than being an analyst or associate in IB/PE/HF – and at a startup you really have to be a jack-of-all-trades rather than just an Excel jockey.

The 2 best parts of this job:

You get to work on something over the long-term and you have a singular focus – building your company. In IB/PE you’re always looking at different deals and you’re not really “building” the business over time in the same way you do at a product-based company.

You get a lot of exposure to executives. Until you advance pretty far up the ladder in banking, you’re never going to interact with Group Heads or the CEO – but I’ve done plenty of that in my role here.

Q: So what’s next for you? Are you going to stick around there or move elsewhere?

I’ve always been interested in investing, so I see myself going to a mutual fund or hedge fund in the future if I can get into a top school and gain access like that.

Q: Right, but wouldn’t that be like going back to banking in that you’re just looking at one-off deals rather than building “long-term value”?

A: Yes it would – but there’s also a disadvantage to working at a normal company, which is that the deals you can do are more limited and they must be related to the company’s core business.

Overall I definitely enjoyed this experience and if I had to go back, I wouldn’t do anything differently (i.e. go into PE/HF instead) – but in the long-term I do see myself as more of an investor than an operator.

Q: You mentioned applying to top business schools – what are the key challenges you’re facing vs. the typical banker/PE guy?

A: Someone who went to an Ivy League school, then worked at a bulge bracket bank, and then a mega-fund has top names on their resume, so it’s tough to compete there – although my current company is well-known, my undergraduate university and bank don’t have the same brand-name recognition.

So rather than competing with the banker crowd directly, I get around that by positioning myself differently.

There aren’t as many people in my position, and my industry is unique – so that lets me tell a story they haven’t heard a million times before and give different long-term goals compared to what everyone else is saying.

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

Great job with all of the content and responsiveness guys, big fan. I graduated ~2 years ago from a large state school and have been working as a Broker for a F250 Commerical Insurance Broker & Risk Management Advisory firm since graduation. Any advice for someone in my position looking to move into Corporate Development within the same firm without a heavy finance background? I love everything about my firm and would like to contribute to it’s growth and success on a larger scale. Any feedback is greatly appreciated.

Network and talk to senior management. Assuming you’re doing a great job in your role and your firm wants to keep you, express your interest in corp dev to your manager (assuming he/she cares about your development) as well as senior management. Ask if you can take on projects in corp dev and potentially transition into the division

Nicole has great advice. I internally networked into CorpDev just that way….you can too!

Research projects are the best to help out with at first because its little risk to the company but can greatly prove your strategic thinking abilities. Make sure to know about all products/services/business units and the general strategy as you will be asked to look at things from a very high level perspective.

The worst thing ever to someone in corp dev is pitching a idea or company that might seem relevant at the more granular business unit level but makes no sense to the overall strategic vision.

What do you think compensation is like for a corp dev associate at a rather young (~3 years) digital media start-up? Definitely pre-IPO and pre-sale. Thank you, as always, for the enlightening content, guys.

Probably on the lower-end… I would guess maybe $80-$100K base salary with fairly generous stock options and RSUs. So if it does well and has a successful IPO / sale, could be a lot more than that base salary. But generally earlier stage start-ups have compensation heavily slanted toward equity. If base salary is significantly higher than that, it would be quite generous.

If you’re coming from a top MBA and want to do IBD then I’d just apply straight for IBD roles first and see how it goes. If you wanted to do corp dev, you might be able to pull it off if you have lengthier experience in banking, went to corporate development for only a year or two, and are OK moving back into IB but receiving a “demotion” for the time you spent away. http://www.mergersandinquisitions.com/corporate-development-recruiting/

Thanks for the quick reply. I actually think my original post was unclear.

My goal is to work on the buyside (public markets) as an investment analyst – particularly at a fundamental/value-oriented fund. Since buyside jobs are extremely hard to get, I was thinking of going for IBD straight out of MBA because the recruiting process is more structured and it is well known that IBD can lead to buyside within a few years.

My question is: can Corporate Development serve a similar function and launch me to buyside in 2-3 years? Also, is it easier or more difficult to go into Corporate Development from MBA versus IBD ?

If you want to move to the buy-side, I think you may want to look at research or S&T roles – this can be a stepping stone for you to enter into the buy-side. You can also apply directly straight out of MBA to the buy side. It can be challenging without previous experience, though if you have a CFA this will help for HF and AM firms. You will also need to demonstrate your passion for the markets. If you don’t have a mock/personal portfolio, it may be a good idea to get one.

I don’t think corp dev can serve a similar function because you’ll ultimately be analyzing investments as an investment analyst. Corp dev is more relevant to IBD related roles. I don’t quite understand your last question.

Thanks again for your prompt response. I do have industry experience (6 years as a Financial Advisor), also have CFA charter. I most definitely will try to secure a buyside job directly out of school, I just know how difficult that can be, so I need to have a backup plan.

My last question was: Which area (IBD vs CD) is easier to get into post MBA ?

Haha, this is a tough question because it really depends on your pitch and perhaps luck. I’d say CD but then I wouldn’t say its easier because there may still not be that many roles available though demand for such roles may be less than that of IB.

Recently I have start my master program one of our topic is to difficult by the name of Corporate Governance, because it’s a new things in my poor country, if you could help me more on this I will be never forget your thought, what is corporate governance and what are they do and what is the structure of them and what is the benefit of this in the local society thank very much if you can help me
Ahmad Almas Form Kabul Afghanistan

Do u think it would be a great career option if one were to move from ib (after working in IB for 7-8 yrs) to corporate development , i know one would have to take a bonus cut but no working for 18 hours and you have time for yourself , fixed pay is also decent so what say?

How much of the work in corp dev involves modelling?
I read a guy who described an lbo model and he said the deal he did ,out of the total work only 20% of it was modelling , which is too less imo.Which role involves more modelling and analysis

It depends on what one is looking for. If you’re looking for a change in lifestyle, it may be a good idea to move.

I am not sure the % of work that involves modeling, though the interviewee mentioned that “most of the deal work consists of reading through documents, modeling (mostly merger models, valuation, and also looking at deal structures such as earnouts), and doing due diligence” so I would imagine around 30-40% of the work is modeling

Understand their recent deal strategy and their big corporate initiative such as G+ and how M&A fits into that… with Google I think it’s going to be 90% cultural fit and understanding their big vision for the future i.e. the melding of social + search and how deals can support that. Also know a few of your previous deals or client experiences really well because they’ll ask about those in-depth.

First of all, I want to say that you are doing a great job with this website, great insights.
I have a question regarding your corporate development articles.

I am really interested in this field. I am currently in a CD team in the pharma IT sector with 4yrs experience but there is not much M&A involved, there is a lot of competittive research, also partnerships but let’s say only one acquisition per year. I do not believe they will pursue other acquisitions any time soon.

I do not have any relevant deal experience per say and when I look at corporate dev jobs out there, they require IB experience with deal experience.

I guess my question is, is there a way to get the basic deal skills (deal rational, valuation, IRR/NPV etc..) so that I can apply for a CD analyst\manager job in another company?

I believe the deal skills necessary for a CD analyst are different from M&A IB analyst…less complex…What are they then? And how can I get some training? I know it will not be hands-on experience but that’s better than nothing, I can still gain true deal skills in my next job. Is my goal realistic?

I think your current role is probably the best avenue for you to develop the skills. Other than that, you may want to look at IB roles if you really want to develop the skills necessary for other corp dev roles. I’m not too familiar w the CD area, but I believe you can also gain such skills through courses online http://breakingintowallstreet.com/biws/

Dear Brian,
I am currently working in an italian company leader in his market, in the management control area. I’m enjoying your financial modeling corse, and I would like to move into the finance industry ASAP cause it’s been always what I’ ve liked.
I would like to ask you what you think about Investor Relations! For what I have understood is the area that stands between the firm and the financial markets, so you meet analysts, brokers, banks and investors and shows the company and how’s moving, and they get an idea of how the stock will move in the next future and you propose it to new investor who wants to join.
I’ve seen that some firms have the area “M&A and Investor Relations” and they look also for people from management control.

Do you think it would be good to break into finance with my job expierience + your corse?

IR is a great area to be in – good exposure to investors and understanding of company fundamentals
There are entry level IR roles which you can look at. I’d try to see if you could move internally within the company you are working for and help them out w IR

I might be the only one asking this question but what does somebody like me do who has an MBA from an ivy top 10 B-school and has worked in Sales, Trading and Portfolio Managment for 15 years do if they want a corp developement job. I’m sick of wall street and frankly….it’s in a depression right now. Frank Dodd is going to kill us completely and pay has gone wayyy down. Corporate developement sounds like a great place to be to spend the rest of my career. Does somebody with my experience have a shot at getting one of these jobs? I appreciate the feedback.

I’m in my 20’s and work in corporate/business development at a post-IPO tech startup. I’ve been there since the pre-ipo days and report directly to the CEO. When I joined the company I basically did everything business…sales, marketing, bus dev. Now the company is much bigger and has departments for each function.

I think a lot of people don’t realize that the job of a corporate development person is to only execute deals. You should never be the person that pitches a deal internally. This is different from ibanking where you are pitching deals all day. The product marketing person or GM of a business unit should be the one pitching the deal internally. This is difficult for ex-ibankers who are used to pitching deals. All you do in corp dev is run models and negotiate term sheets.

This might only apply to the tech industry, but if you really want to run a business and be the person pushing for a deal to get done then product management/marketing is a much better career path. The highest you can go in corp dev is CFO, which is rare. CFOs never make it to CEO in tech. Just a little forewarning…the m&a process at a bank is completely different than a company. Corp dev people just maintain databases, models, and negotiate term sheets. You aren’t really creating revenue for the company, which is what really matters.

My advice for bankers who want to go to the corporate side and work for a tech company is to work in product marketing if you can. Doing deals is really easy. Creating a product from nothing and generating revenue out of it is hard. If you really want to climb the ladder, then you need to actually be responsible for a product. If you can generate revenue for your company, then they will let you do whatever you want after that. The best corporate development people I know in the tech industry all came from product management backgrounds, not ibanking.

I am a third year VP in investment banking, working for a bulge bracket firm. I want to make the move over to a senior corporate development role. Which are the best headhunters / job sites for these types of situations. Appreciate any input.

Any particular industries you are looking at? In my experience, most good corp dev roles are not posted online. People usually recommend candidates (word of mouth) or know the m’gmt team themselves. I’d just find out who the CEO of the corp you want to work for is and email him/her. Can’t recommend any HH because I’d only recommend a HH if I have high regards for him/her. Perhaps you can also try PE guys – they have portfolio companies which might be looking for corp dev guys

One thing to be careful of in corporate development is that the experiences are highly variable depending on the company. There are tons of middle-market companies with small corp-dev groups (1-3 people) that don’t actually do any acquisitions, or do maybe one in a blue moon. They keep the corp-dev function around both because it looks good to the markets to be seen as a buyer, because it provides good market and competitive intelligence, and because maybe, just maybe, the perfect deal will come along and they’ll pounce. Great for the company, not great for your career. So look very closely at the acquisition history of the company before you join, and don’t believe promises about the future unless you’ve seen past performance. Also, some really big companies (I’ve heard that HP is one) have massive corp dev groups but only do really big deals, which means that unlike the interviewee’s experience you will never get near the deal itself as a junior employee, but rather be stuck churning out excel models.

Another downside of corp dev is that you have to deal with corporate culture and corporate politics, which is completely different from the meritocratic, ambition-driven environments you find in top banks and consulting firms. There’s a lot of Dilbert-style mediocrity out there, and often blazing in w/ your fancy MBA and BB credentials can make you very threatening to the corporate middle management that has toiled away for decades to get to VP level, and if you are not careful you can get a target put on your back pretty quickly. You can even end up being threatening to the C-level (including the CEO), who at a middle-market firm may not really have any substantial M&A experience, and find Wall Street to be a bewildering and threatening place.

I used to think corp dev was the bees knees, and if you hit the right spot – like it sounds your interviewee did – then it definitely has all the right elements to be both incredibly stimulating while preserving some lifestyle benefits. However the reality is often far from this. Obviously I’m slightly bitter from my own experience, but just wanted to provide a counterpoint to the awesome experience the interviewee had (I have to admit I’m jealous!).

Let me counter you
Big Companies with small corporate development teams arent really worth it.There wont be much deal activity , and hoping that you will pounce on one is not a great idea.So dont go there.My boss(btw i work at the 5th largest audit firm , in audit , below the big 4) did go to a LARGE blue chip Co in their M&A/Corp Finance dept and there was very little activity , it was recession and they wanted her to do some middle/back end work.Needless to say she quit.

You said @ HP they do big deals , but dont allow junior analyst to get deal exposure.But doesnt the same happen in I-Banks at times , read ‘get my coffee’ ,which is million times worse than being an excel monkey

You said one has to deal with corporate culture and politics.Let me tell you office politics exists everywhere.At i-banks as you said its meritocracy.So the person who brings in the clients and the money for the firm is looked upon (not the people who work under him)The person who brings in the most amount of money is sort of treated as a demi god , as more money means more bonus and more analysts to pamper.Doesnt this create a money minded ‘Toxic culture’ which is far worse than corporate culture (mind you , you can enjoy the latter if youre in the right place) and which is very prevelant in american investment banks.

I didnt understand youre point about dilbert style mediocrity till the end of your 2nd para which ends with ‘finding wall street bewildering’ Could you explain?

Id rather work in a bluechip Co’s corp development/finance dept which has a good m&A history rather than at a BB.I may have less money but i will have a life,all the basic neccessities and with ability to spend on occasional luxury , id be very happy

Just wanted to second J’s point on lots of things – particularly re the dilbert-style mediocrity (but to be fair also some very bright people as well, not just talking about myself), painful politics, and the rampant inferiority complexes all around.

However, I did want to point out that people don’t join corpdev teams just for nonstop deals. Most of us (at least from other folks I’ve talked to) wanted operational experience as well. And you definitely get that from all the different projects you can work on.

There are pros and cons and for the most part, I’d say the tradeoff is usually pretty fair. Pay can be highly variable depending on company and industry though.

I’m interested in breaking into corporate development. I am a former IP attorney currently working in the Finance department (in a non-finance role) at a F500 company. With no finance background, how can I self-educate myself on the ins and outs of corporate development so I’ll know what I’m talking about when I approach, say, the VP of Corporate Development about opportunities to transition? I know there’s a lot on this website (which is great, by the way), but much of it is more specific to true banking.

I’m in a somewhat similar situation. I went to a T20 undergrad in engineering then directly to grad school in Europe since I realized i wanted to break into finance. I did 2 Masters at a T20 Europe school in Int’l Mgmt and Finance. My grades were about 3.0 average throughout. I’m now in South America working at a holding group that owns 7 companies related to engineering/construction, real estate, infrastructure/concessions, and industrial services.

I work in the Infrastructure department where my work is most closely related to project finance. My responsibilities primarily involve due diligence (in the sense of obtaining all the inputs before financial modeling can be done), and should the deal go through, I would also handle execution. My company is beginning to internationalize, and I feel that a formal corporate development department will be formed (or should be) and I’m figuring out how to get involved in that area should it be formed. In my area i do relate with much of whats mentioned in this article (exposure to C-Level execs, all projects are long-term, partnerships, etc.)

I took the job because the opportunity was there, but I still want to break into banking because I feel that I have way too much downtime and I want more exposure to transactions, execution and financial analysis. Now i do financial analysis, but very little as opposed to technical & legal analysis and coordination. I work similar hours to the ones described in this article. I do also find myself the youngest one by far in my department (I’m 24, the 2nd youngest person is 29) and while I do have friends, i also find myself wanting for more camraderie in the workplace. I’ve had this job for 5 months now. For the time being (unless something happens) I’m planning on sticking around to gain experience. But I do notice that moving up in this company takes a long time.

I’ve already done graduate study (not MBA) but attending top business school is something I am interested in as well if it can facilitate entry into investment banking. I feel my profile and experience are geared towards project finance, but also potentially infrastructure related finance (oil, energy, transportation, etc.)

So, question: based on my profile and situation, do you have any advice, comments, insights on my profile and tips on how to move towards my goal of breaking into finance? I know that networking helps, but most of my exposure is to industry executives (and not finance), plus I’m in South America (a ways from NYC and London).

Also, I didn’t mention pay … but in South America pay is shit compared to the numbers I see on this site … so, obviously it’s a motivating factor to move to NYC or London (I have US Citizenship) … I moved here because of the opportunity for work experience, but the long term goal is to move back to a 1st world country (the novelty of living in a 3rd world country wears off quickly, and you miss things you used to take for granted).

I’m not sure what your question is specifically, but in general your best bet would be to go to NYC or London in-person to network at those places and focus on PE infrastructure funds or maybe larger companies that also do corporate development in those areas. I would not bother with an MBA unless in-person networking fails.

To clarify, I want to break into investment banking at the associate level. I’m going to be doing strategy development and financial analysis for my company (I just got word this week). The work and experience I know I will enjoy. However, the pay is still shit.

My question is: how long should I do this job to have relatively significant experience to be able to break into investment banking as an associate by networking and not doing an MBA?

I’m assuming that experience in something related to finance, like corporate development, is requisite to at least prove that I know my stuff, along with my Masters in Finance to be able to justifiably look to break in as an associate. Is this a logical assumption?

I don’t think it’s possible to network your way in at the associate level without prior IB experience unless the market is frothy. You might actually be better off trying to get into PE from there. Most large banks won’t hire you unless you do an MBA or you’ve done banking elsewhere before.

From someone who is familiar with the process of recruiting in general and both the world of High Finance and Startups, my question is the following is it slightly easier for someone from a non pedigree completely random background to break into the world of startups vs. investment banking? When I say slightly easier, a 1 percent chance of breaking in is still better than a 0.000001 chance of breaking in. Although most of the key employees in startups today have blue chip educational and experience backgrounds, you sometimes read in the histories of both High Tech and “Granola product” startups of key employees from random backgrounds who manage to get hired at a early to middle stage and later end up winners on IPO day or even key executives twenty years later. I will give some examples:

1. Chris Espiona, a high level product VP at Apple happened to be Steve Wozniak’s teenage computer hobby buddy. He didn’t have much skill at first and just learned as he went along. He had no college degree and was hired to do grunt work in the garage.
2. One high tech startups hired some former communist, pot smoking hippie, who was willing to work in the garage for stock options as a tech grunt. Of course almost a decade later, he ends up being the CTO with 64 million dollars on IPO day.
3. One organic products company entrepreneur hires his friend from his volunteer days with some leftist third party political campaign “because his friend seems detail oriented” when the company is run out of his barn in Vermont. Twenty Years later he is a 5 million dollar a year Chief operating officer.

4. One environmentally friendly sporting goods company entrepreneur ( like Patagonia) meets an Australian hippie surfer type on a rock climb in Peru and senses that he is great with people, hires him as the first salesman. Twenty years larter, he is VP of marketing.

To sum up, is it still possible today for a person from a random background to break into the world of startups, like the people in the above scenarios, or has the world of startups become as structured and pedigree based as finance?

The short answer is that it is 10000x easier to “get into” a startup with no pedigree because no one gives a crap – they just care about results. Think about the “pedigree” Mark Zuckerberg had in 2003. It definitely helps to know the right people and have connections in places like Silicon Valley but it is not essential as long as you get results.

I just saw an ad for this role in a real estate company in SGP, open to fresh grads or those with 1-2 yrs of relevant experience:

Job description:
…provide analytical, corporate finance and general support services to the team which will include high level Group wide interaction
….assisting in transaction execution and marketing
…performing fund analysis
…conducting market and industry research

I have a question regarding the corporate development part 2. I’m currently working as an analyst in the corporate development depart at CIBC. I’m a co-op meaning I’ll only be here for four months. I’m wondering if this position will set me up for IBD (in the sense that how will IB recruiters value this internship…or do they look down on corp dev), which I’m interested in for full time recruitment come this fall.

Which internship would be best to take during my junior year if my goal is secure a full-time offer at a BB or top MM investment bank upon graduation: GE Energy’s Financial Management Program (FMP) or a SA at a small regional boutique investment bank?

Boutique. I did my junior year internship at a tiny regional boutique in NYC and was able to get a FT IB position at a bulge bracket firm. Having done banking in the past at a tiny no-name bank is better than a non-banking position at a well known firm (unless it’s consulting at MBB or something similarly prestigious).

I’m doing an accounting internship now, but I don’t have a formal title. Could I call myself an “Accounting Analyst,” assuming I let my boss know about it? I analyze statements for discrepancies between forecasts and actual results, among other things. Just trying to get a better word than intern I guess

From the looks of it, Corp Dev work is I-Banking with a lower salary ceiling, and without the banking hours/lifestyle. If this is the case, I would assume that this would be a career path that would be highly sought after. I have read in some previous comments on part 1 of the series that it is easier to get a corp dev associate position out of a top B school than it is to get a banking associate position.

1) is this truly the case and if true is that solely about the money?
2) if you come into B-school without banker experience trying to get into corp dev, is it better to pursue a banking internship or a consulting/strategy internship for the summer?

This may be a stupid question, but why would a company, F500 or otherwise hire someone fresh out of MBA to a corp development role with no banking experience, even out of a H/S/W, when they can have a banking analyst?

I work in CorpDev. Most people I’ve meet in the industry went to i-banking after college/MBA and move later to corpdev. Other than being generally accepted as the way-we-do-things, the bank prestige helps open doors for exit opps. The trade-off between long hours/no life but much more money is more appealing to someone fairly young compared to someone a bit older who wants a family or just a life in general.

Does anyone else think that being an operator and creating long term value is useful in investing? actually knowing how to do it makes it seem like you’d have an edge in spotting value accretive things.. this would be especially useful if he were to target a mutual fund or a fundamental based value fund.

That is a good point, but usually when you’re investing you don’t really assess the operations of the company in detail… maybe some funds/investors do, but most of the time it is more of a financial decision. I agree it could be helpful, but it depends a bit on the type of fund as well.

I’m in a similar situation in terms of background/pedigree to date: good undergrad degree (T20), but not HYP etc. and have accepted an offer with a MM/Midcap bank. Attending top business school is something I am interested in as well. I’m curious though, when you say top, do you mean HSW, M7, or top 13? Do you think your experience will be compelling to the top 3? Are you using as consultant? Is there anything else you can share in this area?

Speaking for the interviewee, he is really aiming for HSW but might be willing to settle for a top 10 US program since any of those programs would be better-known than his university.

He has also done a lot of things outside of work, much more than the usual banker/consultant/PE person and that helps with his story as well. He has a very specific vision/goal that is not that common (i.e. not “I want to become a PE Partner!”) and involves what his company is doing + the experience in China. I would like to say more but then it would give away where he works.

He is not using a consultant but going through friends and others who got into top business schools to get feedback.

He actually does not work at a social network (something in an adjacent area). And China already has 3-4 major social networks (unlike the US its a fragmented market). But otherwise I’d agree with you. :)

I’m a senior accountant at one of Big4 Accounting firm. (3 yrs exp)
I can break down a company’s financial in a blink.
Not really sure about financial ‘modeling’.
How should I try, what approach should I take to break into IB?
How high or low would you say my chances are?

Unfortunately, it underscores what I’ve come to find after a few years in the industry. Sometimes no matter the breadth, quality, or brand name of your experience, it’s still hard (if not impossible) to live down a non-target, no name school on your CV. I’ve seen resumes of perfectly qualified candidates get tossed out in favor of people with inferior experience, but an Ivy League credential.

Thanks for the reply. I understand that making it to the C – level positions would take 20-30 years, how long is the track to GM or VP of Corp development coming out of a top tier B-school with related experience.

Maybe 10-15 years? It’s hard to generalize because as one commenter pointed out, people at normal companies actually stay there longer… it’s not like banking where there can be almost 100% turnover in some years as everyone quits or gets laid off. And it’s very dependent on how well you can play the office politics game – that is a much bigger factor at huge companies and sometimes the politics outweigh your actual results.

It is politics as well as it is reason. In banking deals are value offerings. In companies it is not. In companies deals are support function. We are facilitators. Whenever we come up with any interesting target, we check it out with business unit (BU) head. It is BU head who has a great say for he will be integrating the target in his unit. To be CEO, one needs to either make a product or sell the heck of it.

I worked at two large tech companies (think MSFT,AMZN etc)and compared to banking it’s basically a much slower path to the top, and the salaries aren’t as top notch.

However one thing that I really, really enjoyed there was working on long term projects that add value to the company:

You stay with a project for more than several years, and you learn everything about it, you improve it, you wait for another shipping cycle, you improve it again.

It’s different type of work compared to banking because even if you’re at the bottom, you still get to be “creative” and think of some crazy idea that just might work (instead of being an excel slave).

I think the main reason people don’t move up so fast is that people don’t quit their jobs so much and your director might stay a director for 10 years or more if he’s good, so you can’t move up from being a senior manager. But that’s probably because people enjoy their jobs a lot more…